GH¢1 Fuel Levy: We either pay through tariffs or taxes, says former PURC Boss

“Whether we like it or not, we pay for power through tariffs or taxes,” said Dr. Nii Darko Asante. He is the former Executive Secretary of the Public Utilities Regulatory Commission (PURC).

Dr. Asante spoke during a panel discussion on Joy News’ PM Express with Evans Mensah on June 4. His comments followed Parliament’s approval of the Energy Sector Levy (Amendment) Bill, 2025. This bill introduces a GH¢1 levy on petroleum products to help clear debts in Ghana’s power sector.

He warned that many Ghanaians are upset about the new levy. However, they must realize that debt does not disappear due to public anger. “The government doesn’t manufacture money,” he emphasized. The President and Energy Minister won’t pay from their pockets; it will come from citizens.

Dr. Asante identified two related problems in the power sector. First, there is ongoing under-recovery of costs. Second, there are huge debts from years of inefficiencies. “Even if we fix inefficiencies today, that debt remains,” he stated.

He noted that Ghana still owes Independent Power Producers (IPPs) and fuel suppliers. The PURC helps manage current expenses and ensure tariffs reflect economic realities but cannot address existing debts.

“The owner of the debt must handle it,” he explained. “And who owns ECG? We do—the people of Ghana.” Therefore, the government must find a way to pay these debts on behalf of citizens.

Ignoring this reality could have serious consequences, he warned. If Karpowership threatens to shut down for unpaid bills, increasing tariffs won't cover old debt. The government needs to find that money, often leading to more taxes or levies.

Dr. Asante addressed political discomfort around tariff hikes directly. “We can demand lower tariffs,” he said, “but low tariffs can create more debt.”

He also argued against believing that improving ECG’s efficiency alone would solve the problem. “Even if ECG becomes 100% efficient tomorrow, it doesn’t erase billions in existing debt.”

As the government defends the new levy as necessary for stabilizing power supply and settling arrears owed to IPPs, Dr. Asante called for transparency and accountability as well.

“People are more willing to pay if they see results,” he said. “If we’re paying more, let’s see fewer blackouts and better service.”